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Feb 01, 2013, 10.41 PM IST | Source: CNBC-TV18

Telangana turmoil worries Andhra Pradesh Inc

The Telangana tussle is back in focus with the UPA Government missing the deadline to take a call on the seperate statehood issue. However, the continued uncertainty is drawing a mixed response from business houses operating in the region.

The Telangana tussle is back in focus with the UPA Government missing the deadline to take a call on the seperate statehood issue. However, the continued uncertainty is drawing a mixed response from business houses operating in the region. Appaji Reddem and Arvind Sukumar report.

K Chandrasekhara Rao, President, TRS, "We are demanding resignations of all Telangana public representatives like ministers, Parliament members and MLAs. When Andhra Congress people can threaten the high command, why can't we? Don't we have the guts?"

Hard talk, hartals, heated agitations. Hyderabad is once again witnessing unrest over the Telangana seperate state issue. With the row raging on for years now, the collateral damage to business houses has been significant. Various sectors including IT, Biotech and realty, have either faced delays in project cycle, dip in pricing or have been forced to look at expanding in other states.

According to reports, the Biotech industry faced losses of over Rs 1000 crore in 2009 due to the agitations. No new firms are coming in with investments and existing firms are expanding in other states like neighbouring Karnataka. The high profile Metrorail project too has been delayed by a year. But the reaction from the business community this time around has been mixed.

MG Sanghvi, chief managing director, Syndicate Bank says, "No doubt when there is such kind of the political instability, the growth rate goes down. But we are re-aligning ourselves with market demand. Whatever market demand, we'll definitely cater."

Adding to the sentiment, BA Prabhakar, chief managing director, Andhra Bank says "As far as the business houses and the economy are concerned, all this news has been discounted. It has been going on for the last three years. So, I think market has already discounted all these factors. It has already reflected on the current growth etc"

However, the delay in decision making and frequent agitations are still having some impact. For example- the Rs 20,000 crore L&T Hyderabad Metrorail, the biggest ongoing infrastructure project in Hyderabad is facing a one year delay in project execution, reportedly due to Telangana agitations.

VB Gadgil, managing director and chief executive officer, L&T Hyderabad Metrorail says, "There will definitely be some concern but I am sure that authorities will be taking care of that. There is concern because we are working on the road; this is not a green field project which can be coddled off. Today we are on road and whatever the properties or whatever is happening is accessible to common people."

However, industry bodies like CII and FAPCCI have now stepped in, urging the Centre to take a final decision on Telangana once and for all.

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